Penn National Merger Approved by Iowa Racing Gaming Commission

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. October 14, 2008

JUNE 6, 2008. Penn National Gaming announced that it had entered into a definitive agreement to be acquired by PNG Acquisition Company Inc. ("Parent"), an entity indirectly owned by certain funds managed by affiliates of Fortress and Centerbridge. Under the terms of the merger agreement, if the merger is completed by June 15, 2008, the Company's shareholders will be entitled to receive $67.00 in cash, without interest, for each share of Company common stock they own. If the merger is not completed by June 15, 2008, the $67.00 per share merger consideration is to be increased $0.0149 per day.

Since consideration of the merger remains pending before a number of state regulatory authorities, as more fully described below, the Company has concluded that it is unlikely that all of the requisite regulatory approvals will be obtained on or prior to June 15, 2008. In accordance with the terms of the merger agreement, the Company and/or Parent may, upon written notice, elect to extend the expiration date of the merger agreement by 120 days, from June 15, 2008 to October 13, 2008. The timing of the closing is subject to obtaining certain regulatory approvals and satisfying other customary closing conditions; however, no assurance can be given whether or when such regulatory approvals may be obtained or such other customary closing conditions may be satisfied.

At a special meeting of shareholders held on December 12, 2007, Penn National Gaming shareholders approved the merger agreement. Also, in December 2007, the applicable waiting period under the Hart-Scott-Rodino Act expired without Fortress, Centerbridge or the Company receiving a second request for information.